In Missouri, Grandchildren are Children Too!

Missouri’s wildcard provides additional exemptions to a head of a family for “unmarried dependent children.” Last week, in St. Louis Judge Charles “Sketch” Rendlen III held that “children” includes grandchildren. So fortunately Missouri will continue to recognize that grandkids are children also.

Although the result sounds obvious as I have phrased it here, it was not a foregone conclusion. The law itself is somewhat complex on its face:

Each head of a family may select and hold, exempt from execution, any other property, real, personal or mixed, or debts and wages, not exceeding in value the amount of one thousand two hundred fifty dollars plus three hundred fifty dollars for each of such person’s unmarried dependent children under the age of eighteen years or dependent as defined by the Internal Revenue Code of 1986, as amended, determined to be disabled by the Social Security Administration, except ten percent of any debt, income, salary or wages due such head of a family. RSMo. 513.440

The trustee argued that a “child” should only include the lineally direct (or adopted) offspring of the debtor. Judge Rendlen, however, pointed to other decisions in Missouri which have concluded “children” included “stepchildren” who were not adopted by the debtor but dependent upon him. And he pointed out the statute does not refer to a “parent” but rather a “head of a family” which is typically a broader concept.

As Judge Rendlen concluded stirringly in reference to an earlier case:

To have ruled otherwise would have stripped the statute of its intended purpose. The statute provides relief to a debtor who rose to the occasion of his circumstances and supported a child to whom he was morally, even if not legally, obligated. Such an admirable act (which public policy would encourage) is not made any less worthy because the [head of family] is not the biological or adoptive parent of the child, and a non-parent [head of family] is not any less deserving of the exemption.

Judge Rendlen further concluded that the statute does not require that the debtor have claimed the grandchild on his taxes as a dependent — a secondary option regarding adult disabled dependents does, however — but rather be “dependent” which is a factual issue about who provides the support to the child.

Although the judge critiqued the trustee’s position as “brutally restrictive,” in fact this case represents an example of a trustee trying to discover the limits of exemptions laws. Such “test” cases can be nerve-racking for the people involved but they are a necessary way to develop the body of law so attorneys and consumers can finally know for certain how the law applies to new situations. So, now we know, grandchildren are children!

Case: In re Joseph Odell Hall, #05-52922-705 (Bankr.E.D.Mo.) decided October 17, 2007.